CMA Competition & Markets Authority

Guidance for lettings professionals on

consumer protection law

Helping you comply with your obligations

13 June 2014 CMA31

Contents

Page

1. Purpose and scope ............................................................................................. 4 Aim of this guidance .............................................................................................. 4 Is this guidance for me? ........................................................................................ 4 What does this guidance cover? ........................................................................... 5 Keeping this guidance up to date .......................................................................... 6

2. Executive summary ............................................................................................ 7 Key principles ........................................................................................................ 9

3. Overview of legislation ..................................................................................... 13 What laws do the CMA and TSS enforce? .......................................................... 13 Trader or consumer? .......................................................................................... 14 Clarifying the legal relationship ........................................................................... 16 The Consumer Protection from Unfair Trading Regulations 2008 ....................... 16 Consumer… ........................................................................................................ 16 Trader… .............................................................................................................. 16 Commercial practice ............................................................................................ 17 Average consumer .............................................................................................. 19 Transactional decision ......................................................................................... 21 Giving misleading information to consumers ....................................................... 22 Failing to give necessary information to consumers............................................ 23 Material information ............................................................................................. 24 Taking reasonable steps to check things out… ................................................... 25 Invitation to purchase .......................................................................................... 26 Acting aggressively ............................................................................................. 27 Professional diligence and the general prohibition against unfair commercial practices ............................................................................................................ 28

Banned practices ................................................................................................ 29 Membership of codes of practice and claims about your business ................ 29 Advertisements and sales techniques ........................................................... 29 Claims about whether you are in business or not .......................................... 30 Contact with the consumer, including dealing with problems and making personal visits ............................................................................................... 31

Business protection from Misleading Marketing Regulations 2008 ..................... 31 Unfair Terms in Consumer Contracts Regulations 1999 ..................................... 33 Supply of Goods and Services Act 1982 and Scottish common law ................... 34 Unfair Contract Terms Act 1977 .......................................................................... 35

4. Advertising to and contracting with the landlord........................................... 36 The agent’s relationship with the landlord ........................................................... 37

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Information about your services .......................................................................... 38 Information about your fees and charges ............................................................ 40 The agent’s contract with the landlord ................................................................. 43 Renewal commissions and sale commission ...................................................... 43

5. Marketing property: advertising and providing information to tenants ....... 47 Gathering information before marketing a property ............................................. 47 Providing information in advertisements and property particulars ....................... 48 Information about costs and charges .................................................................. 51

Non-optional fees .......................................................................................... 52 Variable and optional fees ............................................................................. 53 Future contingent charges ............................................................................. 54

Advertising online using platform operators… .................................................... 55 6. Negotiating, conducting viewings and arranging and signing the tenancy

agreement ......................................................................................................... 56 Be clear about your duties to the parties ............................................................. 57 Viewings by prospective tenants ......................................................................... 57 Pre-tenancy checks ............................................................................................ 58 Guarantor requirements ...................................................................................... 59 Pre-tenancy payments and holding deposits ...................................................... 61 Fairness of the tenancy agreement ..................................................................... 64

7. When the tenant moves in................................................................................ 67 Giving tenants the information they need before they move in ............................ 67 Energy supply .................................................................................................... 69 Handing over the property .................................................................................. 69 Taking a security deposit .................................................................................... 70

8. Managing the property ..................................................................................... 73 Agents’ and landlords’ duties to tenants .............................................................. 73 Accessing the property ....................................................................................... 74 Repairs ............................................................................................................... 74 Tenant’s breach of tenancy agreement ............................................................... 75 Agents’ duties to the landlord .............................................................................. 77

General contractual duties ............................................................................. 77 Repairs .......................................................................................................... 77 Rent collection & handling money.................................................................. 78 Other services ............................................................................................... 79

9. Renewal/termination of the tenancy ................................................................ 81 Giving and accepting notice ................................................................................ 81 Charging tenants fees for renewing or exiting a tenancy agreement .................. 82 Exiting the property and dealing with the security deposit ................................... 83

10. What happens if I don’t comply with the legislation? .................................... 86 What enforcement action might an enforcer take? .............................................. 86 Civil enforcement ................................................................................................ 86 Criminal enforcement under the CPRs and BPRs............................................... 87

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Under what circumstances might enforcers be likely to take enforcement action? ........................................................................................................................... 88

What penalties might you face? .......................................................................... 88 What action might a consumer take? .................................................................. 91

ANNEX A – SOME RELEVANT HOUSING LAW .................................................... 92 Creation and ending of tenancy agreements ...................................................... 92 Fees and charges ............................................................................................... 93 Security deposits ................................................................................................. 94 Maintenance and repair ...................................................................................... 95 Landlord registration ........................................................................................... 96

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1. P U R P O S E A N D S C O P E

Ai m of t hi s g ui d a n c e

1. 1 T hi s g ui d a n c e i s t o h el p l etti n g s pr of e s si o n al s c o m pl y wit h c o n s u m er

pr ot e cti o n l a w s, a n d l a w s a b o ut d e ali n g wit h ot h er b u si n e s s e s, i n t h e c o nt e xt

of l etti n g pri v at el y o w n e d r e si d e nti al pr o p ert y.

1. 2 It i s i nt e n d e d t o c o m pl e m e nt e xi sti n g i n d u str y s c h e m e s s u c h a s t h o s e

o p er at e d b y i n d u str y b o di e s a n d c o d e s of c o n d u ct, w hi c h h el p l etti n g s

pr of e s si o n al s k e e p u p -t o-d at e wit h c h a n g e s t o t h e l a w, a c hi e v e c o m pli a n c e,

a n d pr o vi d e g o o d q u alit y s er vi c e s t o t e n a nt s a n d l a n dl or d s.

I s t hi s g ui d a n c e for m e ?

1. 3 T hi s g ui d a n c e i s ai m e d at l etti n g s pr of e s si o n al s. B y l etti n g s pr of e s si o n al s w e

m e a n a n y o n e w h o, a s p art of t h eir b u si n e s s, s u p pli e s s er vi c e s r el at e d t o t h e

l etti n g of pri v at el y o w n e d r e si d e nti al pr o p ert y. It ( or p art s of it) a p pli e s t o y o u if

f or ex a m pl e y o u ar e:

a l etti n g a g e nt ( pr o vi di n g l et o nl y, r e nt c oll e cti o n a n d/ or m a n a g e m e nt

s er vi c e s)

a l a n dl or d d e ali n g wit h r e si d e nti al t e n a nt s (i n cl u di n g pr o s p e cti v e o n e s)

a b u si n e s s t h at pr o vi d e s s o m e f or m of h o sti n g s er vi c e/ pr o p ert y p ort al or

pl atf or m t hr o u g h w hi c h pr o s p e cti v e l a n dl or d s a n d t e n a nt s c a n c o nt a ct

e a c h ot h er

a n y o n e a cti n g f or or i n t h e n a m e of a n y of t h e a b o v e.

4

1. 4 N ot all p oi nt s li st e d i n t h e g ui d a n c e a p pl y t o e v er y l etti n g s pr of e s si o n al, si n c e

t h e r a n g e of s er vi c e s t h e y off er m a y diff er. W e e x p e ct l etti n g s pr of e s si o n al s t o

b e a bl e t o i d e ntif y w hi c h s e cti o n s ar e r el e v a nt t o t h e m. H o w e v er, if w e h a v e

i d e ntifi e d a s e cti o n a s b ei n g p arti c ul arl y r el e v a nt t o o n e s p e cifi c a u di e n c e, w e

h a v e hi g hli g ht e d it.

1. 5 It i s n ot al w a y s cl e ar w h er e t h e li n e s h o ul d b e dr a w n w h e n d e ci di n g w h et h er

s o m e o n e i s a cti n g i n t h e c o ur s e of t h eir b u si n e s s a n d i s t h er ef or e a l etti n g s

pr of e s si o n al. P ar a gr a p h s 3. 6 – 3. 1 1 s et o ut o ur vi e w s o n w h et h er s o m e o n e

mi g ht b e c o n si d er e d t o b e a cti n g i n t h e c o ur s e of t h eir b u si n e s s (tr a d er) or n ot

a cti n g i n t h e c o ur s e of a b u si n e s s ( c o n s u m er) i n t h e c o nt e xt of l etti n g s.

1. 6 T hi s g ui d a n c e i s n ot i nt e n d e d t o i nf or m t e n a nt s of t h eir ri g ht s a n d o bli g ati o n s

i n t h e l etti n g s pr o c e s s. Ot h er a g e n ci e s ar e b ett er pl a c e d t o d o t hi s a n d h a v e

alr e a d y pr o d u c e d h el pf ul m at eri al. 1

W h at d o e s t hi s g ui d a n c e c o v e r ?

1. 7 T h e f o c u s of t hi s g ui d a n c e i s o n a cti viti e s b et w e e n l etti n g s pr of e s si o n al s a n d

t e n a nt s t h at i n v ol v e A s s ur e d S h ort h ol d T e n a n ci e s ( A S T), or s h ort a s s ur e d

t e n a n ci e s i n S c otl a n d. It i s n ot i nt e n d e d t o c o v er l o n g l e a s e h ol d s a n d bl o c k

m a n a g e m e nt. It d o e s n ot c o v er pr o p ert y s al e s. 2

1. 8 It c o v er s t h e f oll o wi n g l a w s:

t h e C o n s u m er Pr ot e cti o n fr o m U nf air Tr a di n g R e g ul ati o n s 2 0 0 8 ( C P R s)

t h e B u si n e s s Pr ot e cti o n fr o m Mi sl e a di n g M ar k eti n g R e g ul ati o n s 2 0 0 8

( B P R s)

t h e U nf air T er m s i n C o n s u m er C o ntr a ct s R e g ul ati o n s 1 9 9 9 ( U T C CR s)

t h e S u p pl y of G o o d s a n d S er vi c e s A ct 1 9 8 2 ( S G S A)

U nf air C o ntr a ct T er m s A ct 1 9 7 7 ( U C T A)

1. 1 0 T hi s g ui d a n c e d e s cri b e s h o w t h e l e gi sl ati o n a p pli e s t o l etti n g s pr of e s si o n al s’

pr a cti c e s aff e cti n g c o n s u m er s i n E n gl a n d, W al e s, S c otl a n d a n d N ort h er n

Ir el a n d. It s h o ul d b e r e a d a s b ei n g r el e v a nt i n all of t h e s e n ati o n s. W h er e

t h er e ar e n ati o n al diff er e n c e s i n t h e l e g al c o nt e xt, or r e q uir e m e nt s, t h at h a v e

a n i m pli c ati o n f or t hi s g ui d a n c e, w e h a v e fl a g g e d t h e s e.

1. 9 W e al s o m a k e r ef er e n c e t o ot h er l a w s a n d d uti e s t h at t h e C o m p etiti o n a n d

M ar k et s A ut h orit y ( C M A) 3 a n d Tr a di n g st a n d ar d s s er vi c e s ( T S S) 4 c a n e nf or c e

u n d er P art 8 of t h e E nt er pri s e A ct 2 0 0 2, t h at w e c o n si d er ar e li k el y t o b e

r el e v a nt t o l etti n g s pr of e s si o n al s.

1 S e e, f or e x a m pl e, H o w t o r e nt 2 S e e O F T g ui d a n c e o n pr o p ert y s al e s ( O F T 1 3 6 4) for i nf or m ati o n. 3 O n 1 A pril 2 0 1 4 m a n y of t h e f u n cti o n s of t h e Offi c e of F air Tr a di n g ( O F T) al o n g wit h t h e f u n cti o n s of t h e C o m p etiti o n C o m mi s si o n ( C C) w er e tr a n sf err e d t o t h e C o m p etiti o n a n d M ar k et s A ut h orit y ( C M A) a n d t h e s e b o di e s w er e a b oli s h e d. 4 F or t h e p ur p o s e s o f t hi s g ui d a n c e, T S S r ef er s t o l o c al a ut h orit y t r a di n g s t a n d ar d s s er vi c e s i n E n gl a n d, S c otl a n d a n d W al e s a n d al s o t o t h e Tr a di n g St a n d ar d s S er vi c e wit hi n t h e D e p art m e nt o f E nt er pri s e Tr a d e a n d I n v e st m e nt i n N ort h er n Ir el a n d.

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https://www.gov.uk/government/publications/how-to-renthttp://80.86.35.165/shared_oft/estate-agents/OFT1364.pdf

1.11 This document does not provide guidance on other law, such as housing law, which is also relevant to letting private residential property, although Annex A provides a brief summary of some key elements, and links to other resources.

1.12 This guidance is designed to help businesses that wish to comply with consumer protection law to identify what they need to do to achieve this. It does not attempt to address fraudulent or organised criminal activity, which are matters for enforcement by the appropriate bodies (for example the police).

1.13 This guidance sets out the views of the CMA. As we highlight in paragraph 2.7

below, it is not a substitute for the law itself and lettings professionals should seek their own independent legal advice on the law.

Keeping this guidance up to date

1.14 This guidance only covers relevant law that is in force at the time of drafting. It does not take into account any proposed changes to consumer protection legislation or law implemented from June 2014 onwards, including those referred to below.

1.15 The Consumer Rights Act (presently the Consumer Rights Bill) will, if enacted, replace the UTCCRs and SGSA, together with certain other consumer protection provisions.

1.16 The Consumer Protection from Unfair Trading (Amendment Regulations)

2013 will, when they come into force amend the CPRs.

1.17 The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 come into force in June 2014.

1.19 This guidance is compliant with the BIS Code of Practice on Guidance on

Regulation.

1.18 The CMA will review this guidance as and when appropriate, in the light of changes in the law and other relevant factors. An electronic version containing any revisions made, will be made available at www.gov.uk/cma

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http://www.gov.uk/government/publications/draft-consumer-rights-billhttps://www.gov.uk/government/publications/misleading-and-aggressive-commercial-practices-the-draft-consumer-protection-from-unfair-trading-amendment-regulations-2013https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/310044/bis-13-1368-consumer-contracts-information-cancellation-and-additional-payments-regulations-guidance.pdfhttp://www.gov.uk/cmahttp://www.bis.gov.uk/files/file53268

2. E X E C U TI V E S U M M A R Y

2. 1 I n F e br u ar y 2 0 1 3, t h e Offi c e of F air Tr a di n g ( O F T), a pr e d e c e s s or

or g a ni s ati o n t o t h e C o m p etiti o n a n d M ar k et s A ut h orit y ( C M A), p u bli s h e d t h e

fi n di n g s of it s l etti n g s m ar k et r e vi e w: T h e l etti n g s m ar k et – a n O F T r e p ort

( O F T 1 4 7 9). T hi s w or k w a s b a s e d o n a n a n al y si s of 3, 9 5 1 l etti n g s c o m pl ai nt s

r e c ei v e d b y C o n s u m er Dir e ct5 d uri n g 2 0 1 1, s et o ut i n a n O F T I nt elli g e n c e

R e p ort. 6

2. 2 T h e O F T’ s I nt elli g e n c e R e p ort i d e ntifi e d t h at t h e fi v e m ai n ar e a s of c o m pl ai nt

w er e i s s u e s r el ati n g t o:

f e e s a n d c h ar g e s

l etti n g a g e nt s pr o vi di n g p o or s er vi c e

s e c urit y d e p o sit s

d el a y e d a n d s u b st a n d ar d r e p air s

u nf ai r b u si n e s s pr a cti c e s.

2. 3 T h e l etti n g s m ar k et r e vi e w c o n cl u d e d, a m o n g st ot h er t hi n g s, t h at m a n y of t h e

pr o bl e m s a p p e ari n g a cr o s s t h e m ar k et c o ul d b e d e alt wit h b y gr e at er

u n d er st a n di n g of a n d c o m pli a n c e wit h e xi sti n g c o n s u m er pr ot e cti o n l a w a n d

f or t hi s r e a s o n, t h e O F T, d e ci d e d t o pr o d u c e t hi s g ui d a n c e.

2. 4 O n 1 A pril 2 0 1 4 t h e O F T cl o s e d, a n d m o st of it s r el e v a nt f u n cti o n s w er e

tr a n sf err e d ( al o n g wit h t h e f u n cti o n s of t h e C o m p etiti o n C o m mi s si o n) t o t h e

C M A. 7 T h e C M A a n d t h e Tr a di n g St a n d ar d s I n stit ut e ( T SI) s h ar e t h e r ol e of

w or ki n g wi t h b u si n e s s e s t o dri v e u p st a n d ar d s t hr o u g h cl arif yi n g l e g al

o bli g ati o n s 8 , wit h t h e C M A f o c u s si n g o n i s s u e s t h at a p p e ar t o b e pr o bl e m ati c

a cr o s s a m ar k et. T h e C M A i nt e n d s f or t hi s g ui d a n c e t o c o ntri b ut e t o m a ki n g

t h e l etti n g s m ar k et w or k w ell f or c o n s u m er s, b u si n e s s e s a n d t h e e c o n o m y.

5 N o w Citi z e n’ s A d vi c e ‘ A d vi c e G ui d e’. S e e w w w. a d vi c e g ui d e. or g. u k for i nf or m ati o n. 6 A n n e x e D of T h e l etti n g s m ar k et – A n O F T r e p ort ( O F T 1 4 7 9). T h e O F T di d n ot a s s u m e all c o m pl ai nt s w er e

v ali d, b ut i n st e a d t o o k t h e m a s a n i n di c ati o n of ar e a s of c u st o m er di s s ati sf a cti o n. 7 F urt h er i nf or m ati o n a b o ut t hi s, c h a n g e s t o t h e c o n s u m er pr ot e cti o n l a n d s c a p e a n d cl arit y o n r ol e s i s a v ail a bl e i n

t h e N ati o n al A u dit Offi c e p u bli c ati o n U p d at e o n c o n s u m er pr ot e cti o n l a n d s c a p e r ef or m s , A pril 2 0 1 4 8 T h e C M A pri m aril y pr o vi d e s g ui d a n c e t o b u si n e s s o n s p e cifi c i s s u e s i d e ntifi e d i n t h e c o ur s e of o ur m ar k et

st u di e s, t h e U nf air T er m s i n C o n s u m er C o ntr a ct s R e g ul ati o n s 1 9 9 9 a n d i s s u e s w h er e o ur p arti c ul ar k n o wl e d g e of

t h e m ar k et m a k e s u s b e st pl a c e d t o a d vi s e b u si n e s s. Ot h er b u si n e s s g ui d a n c e o n c o n s u m er l a w i s pr o d u c e d b y

t h e T SI a n d m or e i nf or m ati o n o n t hi s i s a v ail a bl e at w w w.tr a di n g st a n d ar d s. g o v. u k/ a d vi c e/ a d vi c e -b u si n e s s. cf m

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http://www.adviceguide.org.uk/http://www.nao.org.uk/wp-content/uploads/2014/04/Update-on-consumer-protection-landscape-reforms1.pdfhttp://www.tradingstandards.gov.uk/advice/advice-business.cfm

2.5 The CMA hopes that this guidance will help lettings professionals comply with consumer protection law. We also want the guidance to support consistent enforcement by TSS which, as the OFT identified in its market review, will most likely be best placed to take enforcement action (where appropriate), given the fragmented and localised nature of the lettings market. We have worked closely with TSS in preparing this guidance and other support material to ensure that lettings professionals and TSS share a common understanding of the problems and the likely means of addressing these through Trading Standards’ interventions.

2.6 Together, improved compliance and enforcement can have real impact and will ultimately improve the way the lettings market functions.

2.7 This guidance is not a substitute for the law itself nor does it replace the role of a court, which is to provide a definitive interpretation of the law. The guidance sets out the views of the CMA and lettings professionals should seek their own legal advice on the law.

2.8 Information on the law covered in this guidance is summarised in the preceding ‘Purpose and scope’ chapter. Chapter 3 provides an overview of this legislation.

2.9 Subsequent chapters in the guidance broadly follow the ‘lettings journey’, from when letting agents first advertise their services to landlords, through advertising to potential tenants, arranging tenancy agreements and subsequent dealings with tenants in occupation, right up to the termination of a tenancy agreement. Practical steps to help you comply with the law, plus examples of conduct or practices which might breach the law are set out for each stage.

2.10 Chapter 10 explains what action you may face if you do not comply with

consumer protection law and Annex A is a summary of some of the key laws outside the scope of this guidance, which we consider are likely to be of relevance.

2.11 The examples used in the guidance are based on issues which we know are

likely to be relevant to consumers. Many of them were identified in the OFT’s intelligence review. Others have been brought to our attention during the OFT’s consultation on draft guidance9.The guidance does not, however, attempt to cover every situation or practice in which a breach of the legislation may occur and the examples are not exhaustive lists. It is also important to

9 See OFT guidance for letting professionals (OFT1509)

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http://www.oft.gov.uk/shared_oft/consultations/oft1509.pdf

n ot e t h at s o m e e x a m pl e s m a y ill u str at e m or e t h a n o n e t y p e of br e a c h, e v e n

t h o u g h o nl y o n e br e a c h i s hi g hli g ht e d.

2. 1 2 Y o u will n e e d t o r e a d t h e e ntir e d o c u m e nt f or a c o m pr e h e n si v e u n d er st a n di n g

of h o w t o c o m pl y wit h c o n s u m er pr ot e cti o n l a w. H o w e v er, s o m e k e y pri n ci pl e s

t o h el p y o u c o m pl y at e a c h st a g e of t h e l etti n g s pr o c e s s ar e s et o ut b el o w.

K e y pri n ci pl e s

2. 1 3 W h e n y o u a r e a l etti n g a g e nt a d v e rti si n g t o a n d c o ntr a cti n g wit h

l a n dl or d s y o u s h o ul d:

C o m pl y wit h c o n s u m er pr ot e cti o n l a w w h e n d e ali n g wit h l a n dl or d cli e nt s

( u nl e s s it i s cl e ar t h at t h e y ar e a cti n g i n t h e c o ur s e of t h eir b u si n e s s).

M a k e s ur e t h at a n y a d v erti si n g a n d m ar k eti n g of y o ur s er vi c e s t o l a n dl or d s

i s cl e ar, a c c ur at e a n d n ot mi sl e a di n g. Y o u s h o ul d n ot o mit m at eri al

i nf or m ati o n. It i s p arti c ul arl y i m p ort a nt t o e n s ur e t h at y o u cl e arl y s et o ut t h e

f e e s t h at y o u will c h ar g e, a n d e x a ctl y w h at s er vi c e y o u ar e off eri n g t o

p erf or m.

Pr o vi d e f ull i nf or m ati o n a b o ut y o ur f e e s, i n cl u di n g t h o s e t h at ar e v ari a bl e

a n d o pti o n al, a n d a n y i nf or m ati o n gi v e n s h o ul d b e a c c ur at e a n d n ot

mi sl e a di n g. W e c o n si d er y o u ar e m or e li k el y t o e n s ur e c o m pli a n c e wit h

t hi s if y o u s et t hi s i nf or m ati o n o ut i n a cl e ar t ariff of c h ar g e s t h at l a n dl or d s

c a n e a sil y a c c e s s, a n d t h at i s q u ot e d i n cl u si v e of V A T.

• E n s ur e t h e t er m s of a n y c o ntr a ct t h at y o u u s e ar e cl e ar, a n d d o n ot

c o nt ai n hi d d e n s ur pri s e s. Y o ur c o ntr a ct t er m s s h o ul d n ot b e u nf air.

U n u s u al or o n er o u s t er m s s h o ul d b e s et o ut pr o mi n e ntl y.

• E n s ur e y o u c o m pl y wit h y o ur l e g al d uti e s t o w ar d s l a n dl or d s a s t h eir a g e nt

– t a k e pr o p er c ar e of t h eir m o n e y, di s cl o s e a n y s u m s or c o m mi s si o n s y o u

r e c ei v e fr o m t e n a nt s or tr a d e s p e o pl e, a n d pr o vi d e a c c ur at e a d vi c e o n

c o m pli a n c e wit h t h e l a w.

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2. 1 4 W h e n y o u a r e a d v e rti si n g a n d pr o vi di n g i nf or m ati o n t o p ot e nti al t e n a nt s

y o u s h o ul d e n s ur e t h at:

Y o u h a v e a p pr o pri at e pr o c e s s e s i n pl a c e i n or d er t o g at h er a n d c h e c k

i nf or m ati o n t h at y o u pr e s e nt t o p ot e nti al t e n a nt s, s o t h at t h e y ar e n ot

mi sl e d, a n d y o u ar e a bl e t o a n s w er r e a s o n a bl e q u e sti o n s t h e y a s k.

Y o ur a d v erti si n g i s cl e ar, a c c ur at e a n d n ot mi sl e a di n g. It s h o ul d pr o vi d e all

t h e i nf or m ati o n a p ot e nti al t e n a nt n e e d s i n or d er t o m a k e i nf or m e d a n d

t h er ef or e effi ci e nt d e ci si o n s a b o ut t h e pr o p ert y b ei n g m ar k et e d.

Y o ur a d v erti si n g pr o vi d e s p ot e nti al t e n a nt s wit h s uffi ci e nt i nf o r m ati o n

a b o ut c o st s a n d c h ar g e s t o e n a bl e t h e m t o c o m p ar e t h e f ull c o st of r e nti n g

o n e pr o p ert y a g ai n st a n ot h er. All i nf or m ati o n a b o ut c o st s, c h ar g e s a n d

d e p o sit s s h o ul d b e pr e s e nt e d t o g et h er wit h i nf or m ati o n a b o ut t h e c o st of

r e nt.

I nf or m ati o n t h at c a n n ot b e i n cl u d e d, d u e t o r e stri cti o n s o n s p a c e, i s cl e arl y

fl a g g e d a n d m a d e e a sil y a c c e s si bl e (f or e x a m pl e n o m or e t h a n o n e cli c k

a w a y o n a w e b sit e).

2. 1 5 W h e n y o u a r e n e g oti ati n g, c o n d u cti n g vi e wi n g s a n d a rr a n gi n g a n d

si g ni n g t h e t e n a n c y a gr e e m e nt y o u s h o ul d:

E n s ur e t h at pr o s p e cti v e t e n a nt s u n d er st a n d t h e n at ur e of y o ur r ol e a n d

ar e tr e at e d f airl y t hr o u g h o ut t h e n e g oti ati o n s.

• E n s ur e t h at pr o s p e cti v e t e n a nt s ar e gi v e n a n a c c ur at e i m pr e s si o n of t h e

pr o p ert y’ s c h ar a ct eri sti c s a n d ar e a bl e t o vi e w t h e pr o p ert y (if t h e y s o

wi s h).

Pr o vi d e pr o s p e cti v e t e n a nt s wit h cl e ar i nf or m ati o n a b o ut pr e -t e n a n c y

c h e c k s, i n cl u di n g w h at t h e y will c o v er a n d h o w m u c h t h e y will c o st.

Pr o vi d e cl e ar i nf or m ati o n a b o ut a n y g u ar a nt or r e q uir e m e nt s a n d a b o ut t h e

r ol e s a n d r e s p o n si biliti e s of g u ar a nt or s.

Pr o vi d e pr o s p e cti v e t e n a nt s wit h cl e ar i nf or m ati o n a b o ut w h y y o u ar e

a s ki n g t h e m t o p a y a pr e -t e n a n c y p a y m e nt or h ol di n g d e p o sit, t h e s u m

t h at i s r e q uir e d a n d t h e cir c u m st a n c e s i n w hi c h it will/ will n ot b e r ef u n d e d.

E n s ur e t h at t h e t er m s of a n y t e n a n c y a gr e e m e nt t h at y o u pr o vi d e or

r e c o m m e n d f or u s e wit h a t e n a nt ar e f air.

• E n s ur e t h at t h e pr o s p e cti v e t e n a nt h a s s uffi ci e nt ti m e t o f a mili ari s e

t h e m s el v e s wit h t h e a gr e e m e nt.

2. 1 6 I m m e di at el y b ef or e, a n d at t h e ti m e t h e t e n a nt m o v e s i n, y o u s h o ul d:

E n s ur e t h e pr o p ert y i s m a d e a v ail a bl e o n t h e d at e a gr e e d, a n d t h e t e n a nt

i s k e pt i nf or m e d of a n y d el a y s.

E n s ur e t h at w h e n t h e t e n a nt m o v e s i n, t h e pr o p ert y c o nf or m s t o all

st at e m e nt s pr e vi o u sl y m a d e t o t h e t e n a nt a b o ut it s s p e cifi c ati o n (i n cl u di n g

f ur nit ur e, fi xt ur e s, fitti n g s a n d a n y w or k s t h at h a d b e e n a gr e e d).

Pr o vi d e t h e t e n a nt wit h all t h e i nf or m ati o n r e q uir e d b y l a w a b o ut t h e

c o n diti o n of t h e pr o p ert y, al o n g wit h ot h er m at eri al i nf or m ati o n s u c h a s

i nf or m ati o n r el ati n g t o e n er g y s u p pli er s.

E n s ur e t h at a n y s e c urit y d e p o sit i s pr o p erl y pr ot e ct e d a n d t h e t e n a nt i s

gi v e n i nf or m ati o n a b o ut w hi c h s c h e m e it i s wit h.

2. 1 7 W h e n m a n a gi n g t h e pr o p e rt y aft e r t h e t e n a nt h a s m o v e d i n:

If y o u ar e a l a n dl or d, w h e n c arr yi n g o ut a n y s er vi c e s y o u pr o vi d e u n d er t h e

t e n a n c y a gr e e m e nt (i n cl u di n g t h o s e r el ati n g t o t h e pr o p ert y), y o u s h o ul d

c arr y t h e m o ut u si n g r e a s o n a bl e c ar e a n d s kill, a n d i n a ti m el y m a n n er.

• If y o u ar e a n a g e nt pr o vi di n g s u c h s er vi c e s o n t h e l a n dl or d’ s b e h alf, y o u

s h o ul d e q u all y c arr y t h e m o ut u si n g r e a s o n a bl e c ar e a n d s kill, a n d i n a

ti m el y w a y.

Y o u s h o ul d b e f air i n y o ur d e ali n g s wit h t e n a nt s, n ot e nf or c e u n f air t er m s

a n d gi v e t e n a nt s cl e ar i nf or m ati o n c o n c er ni n g w h o i s r e s p o n si bl e f or d oi n g

w h at d uri n g t h e lif e of t h e t e n a n c y.

• If y o u ar e a n a g e nt, y o u s h o ul d d o w h at i s e x p e ct e d of y o u u n d er y o ur

c o ntr a ct wit h t h e l a n dl or d, t a k e pr o p er c ar e of t h e l a n dl or d’ s i nt er e st s, a n d

k e e p t h e m i nf or m e d.

2. 1 8 O n r e n e w al or t e r mi n ati o n of t h e t e n a n c y y o u s h o ul d:

A ct c o n si st e ntl y wit h i nf or m ati o n alr e a d y gi v e n t o t h e t e n a nt o n f e e s f or

r e n e wi n g or e xiti n g a t e n a n c y a gr e e m e nt at t h e pr e-c o ntr a ct u al st a g e.

E n s ur e t h at t h e t e n a nt h a s cl e ar, a c c ur at e i nf or m ati o n a b o ut w h at t h e y

n e e d t o d o t o gi v e n oti c e, a n d al ert t h e m if t h e y g et t hi s wr o n g.

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2.19 Avoid misleading the tenant about whether you propose to retain any money from the security deposit, and if so, how much.

12

3. O V E R VI E W O F L E GI S L A TI O N

3. 1 T hi s g ui d a n c e f o c u s e s o n t h e o bli g ati o n s t h at l etti n g s pr of e s si o n al s h a v e

t o w ar d s cli e nt l a n dl or d s a n d t e n a nt s ( b ot h a ct u al a n d p ot e nti al) u n d er

c o n s u m er pr ot e cti o n l e gi sl ati o n. It c o v er s:

m a r k eti n g, a d v erti si n g a n d ot h er st at e m e nt s m a d e i n t h e c o ur s e of

b u si n e s s

c o n d u ct t h at m a y b e a g gr e s si v e or ot h er wi s e u n pr of e s si o n al

c o ntr a ct t er m s

o bli g ati o n s i m pli e d i nt o s er vi c e c o ntr a ct s

ot h er d uti e s l ai d d o w n b y l a w i n cl u di n g, f or e x a m pl e, t h e l a w s of a g e n c y,

a n d c o ntr a ct.

W h at l a w s d o t h e C M A a n d T S S e nf or c e ?

3. 2 T h e C M A a n d T S S e nf or c e a n u m b er of l a w s t h at ar e p arti c ul arl y r el e v a nt t o

pr a cti c e s r el at e d t o t h e l etti n g of pri v at el y o w n e d pr o p ert y:

T h e C o n s u m er Pr ot e cti o n fr o m U nf air Tr a di n g R e g ul ati o n s 2 0 0 8 ( C P R s),

w hi c h a p pl y w h er e o n e p art y i s a c o n s u m er a n d t h e ot h er i s a b u si n e s s.

T h e B u si n e s s Pr ot e cti o n fr o m Mi sl e a di n g M ar k eti n g R e g ul ati o n s 2 0 0 8

( B P R s), w hi c h a p pl y w h e n b ot h p arti e s ar e b u si n e s s e s. 1 0

T h e U nf air T er m s i n C o n s u m er C o ntr a ct R e g ul ati o n s 1 9 9 9 ( U T C C R s),

w hi c h a p pl y w h e n o n e p art y i s a c o n s u m er a n d t h e ot h er i s a b u si n e s s. 1 1

T h e S u p pl y of G o o d s a n d S er vi c e s A ct 1 9 8 2 ( S G S A), w hi c h i m pli e s t er m s

( w hi c h c a n n ot b e e x cl u d e d w h er e o n e p art y i s a c o n s u m er) i nt o c o ntr a ct s

f or s er vi c e s. I n S c otl a n d, t h e s e pr o vi si o n s d o n ot a p pl y, b ut t h e c o m m o n

l a w pl a c e s o bli g ati o n s o n tr a d er s w hi c h h a v e s u b st a nti all y t h e s a m e eff e ct.

1 0 Ot h er a r e a s o f l a w a l s o a p pl y w h er e b ot h p arti e s ar e b u si n e s s e s. T h e s e i n cl u d e g e n er al c o ntr a ct l a w, t h e

U nf air C o ntr a ct T er m s A ct 1 9 7 7 a n d t h e Mi sr e pr e s e nt ati o n A ct 1 9 6 7, a ll o f w hi c h a r e li k el y t o b e r el e v a nt t o

pr of e s si o n al s e n g a g e d i n t h e l etti n g s s e ct or. 1 1 T h e pl a n n e d i ntr o d u cti o n of t h e C o n s u m er Ri g ht s A ct will r e s ult i n t h e r e pl a c e m e nt of s e v er al pi e c e s o f

c o n s u m er pr ot e cti o n l e gi sl ati o n, i n cl u di n g t h e U T C C R s a n d t h e S G S A i n a d diti o n t o ot h er l e gi sl ati o n .

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• The Unfair Contract Terms Act 1977 (UCTA) some of which applies generally and some only when one party is a consumer and the other a business.

3.3 In addition there is a range of other laws and duties that CMA and TSS can

enforce under Part 8 of the Enterprise Act, that are likely to be relevant to lettings professionals. These include the Accommodation Agencies Act 1953 and the requirements of contract law. More information on the Accommodation Agencies Act 1953 is included in Annex A. Also, information on the law of agency is included in paragraphs 4.3 – 4.4 of chapter 4 where we talk about the agent’s relationship with the landlord.

3.4 This guidance is intended to complement existing guidance on these laws, by

recasting it in a lettings context.12 In the chapters that follow we provide detailed guidance on the CMA’s view of the application of the laws and the practical steps that the CMA considers you can take to reduce the risk of your business practices infringing the law. However, it is important to be aware that this is guidance and that only a court can state definitively what the law requires in any particular situation.

3.5 In this chapter we set out in more general terms how, in our view, the key

concepts and provisions of the CPRs, BPRs, UTCCRs, SGSA and UCTA apply to the issues we have identified in the lettings sector.

Trader or consumer?

3.6 In general, a trader is someone acting for purposes relating to their business, trade or profession, while a consumer is not acting for any of these purposes. It is a question of fact whether a person is acting as a consumer or as a trader, and it is not always clear where the line should be drawn.13

12 Most references to existing guidance are to OFT guidance documents and publications relevant to enforcement of and compliance with consumer legislation that had been published and were in effect prior to the transfer of the various consumer functions to the CMA on 1 April 2014. Certain of those documents have been adopted by the CMA Board, whereas others now fall outside the scope of the CMA’s responsibility. For further information see Guidance on CMA approach to use of its consumer powers consultation 13 UK and EU case law on this topic has dealt with situations where a person enters into a contract for both consumer and professional purposes, where the contract is for future business purposes and where it is unclear whether the individual is acting for professional purposes or not.

14

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3. 7 F or t h e p ur p o s e of t hi s g ui d a n c e, t h e C M A pr o c e e d s o n t h e b a si s t h at:

m o st r e si d e nti al t e n a nt s ar e c o n s u m er s 1 4

m o st l etti n g a n d m a n a gi n g a g e nt s ar e a cti n g i n t h e c o ur s e of a b u si n e s s.

3. 8 Ulti m at el y, w h et h er or n ot a n i n di vi d u al i s a cti n g i n t h e c o ur s e of a b u si n e s s

will c o m e d o w n t o a q u e sti o n of f a ct a n d d e gr e e, a n d it i s diffi c ult t o dr a w a

h ar d li n e. F a ct or s t h e c o urt s h a v e c o n si d er e d r el e v a nt w h e n d e ci di n g o n t hi s

q u e sti o n i n cl u d e w h at t h e p er s o n’ s d a y j o b i s, t h e d e gr e e of pr of e s si o n al s kill

t h e p er s o n a ct u all y h a s, w h et h er t h e y a cti v el y h ol d t h e m s el v e s o ut a s a cti n g

f or b u si n e s s p ur p o s e s, a n d t o s o m e e xt e nt w h et h er t h e p er s o n d eri v e s a

si g nifi c a nt r e g ul ar i n c o m e fr o m t h eir a cti viti e s.

3. 9 T h e c o urt s h a v e r e c o g ni s e d t h at c ert ai n l a n dl or d s ar e t o b e r e g ar d e d a s

c o n s u m er s w h e n d e ali n g wit h l etti n g a g e nt s w h o ar e a cti n g i n a b u si n e s s

c a p a cit y. T hi s i s c o n si st e nt wit h a r e c o g niti o n t h at m e m b er s of t h e p u bli c

l etti n g o ut, f or e x a m pl e, t h eir h o m e s, or p art s of t h eir h o m e s o n a o n e -off or

o c c a si o n al b a si s, ar e li k el y t o b e i n a w e a k er b ar g ai ni n g p o siti o n t h a n t h e

l etti n g s a g e nt s w h o s e s er vi c e s t h e y s e e k t o u s e.1 5 A s b u si n e s s e s,

pr of e s si o n al l a n dl or d s, b y c o ntr a st, d o n ot r e q uir e t h e s a m e d e gr e e of

pr ot e cti o n a s c o n s u m er s. 1 6

3. 1 0 W hil st it s h o ul d n ot b e a s s u m e d t h at e v er y l a n dl or d i s a c o n s u m er f or t h e

p ur p o s e s of t h e l a w c o v er e d i n t hi s g ui d a n c e, t h e C M A c o n si d er s it i s

a d vi s a bl e f or l etti n g a g e nt s t o c o m pl y c o n si st e ntl y wit h t h e r e q uir e m e nt s of

c o n s u m er pr ot e cti o n l a w w h e n d e ali n g wit h all l a n dl or d s, u nl e s s t h e l a n dl or d

i s cl e arl y a c or p or at e e ntit y or r u n ni n g a b u si n e s s t h at l et s o ut m a n y

pr o p erti e s. T hi s i s b e c a u s e t h er e m a y b e s e v er e c o n s e q u e n c e s f or a tr a d er

f or f aili n g t o tr e at c u st o m er s a s c o n s u m er s, if t his i s i n f a ct w h at t h e y ar e ( a s

w e s et o ut i n c h a pt er 1 0). If y o u br e a c h c o n s u m er pr ot e cti o n l a w y o u m a y

c o m mit a n off e n c e, or y o ur c o ntr a ct t er m s m a y b e u n e nf or c e a bl e, or y o u m a y

b e li a bl e t o ot h er e nf or c e m e nt a cti o n.

3. 1 1 Si mil arl y, t h e C M A c o n si d er s it a d vi s a bl e f or all l a n dl or d s t o c o m pl y wit h t h e

r e q uir e m e nt s of c o n s u m er pr ot e cti o n l a w w h e n e v er d e ali n g wit h t e n a nt s of

r e si d e nti al pr o p ert y, f or t h e s a m e r e a s o n s a s s et o ut at 3. 1 0 a b o v e.

1 4 W h er e a t e n a nt e nt er s a t e n a n c y f or a pr o p ert y i n w hi c h t h e y pl a n t o li v e, t h e C M A c o n si d er s it u nli k el y t h at a

c o urt w o ul d r ul e t h e y ar e a cti n g i n t h e c o ur s e of a b u si n e s s ( s e e H eif er I nt er n ati o n al I n c v C hri sti a n s e n [ 2 0 0 8]

B u s L R D 4 9 at p ar a 2 5 0). 1 5 A w e a k er b ar g ai ni n g p o siti o n i s c h ar a ct eri sti c of a c o n s u m er’ s p o siti o n i n r el ati o n t o tr a d er s g e n er all y. 1 6 S e e O F T v F o xt o n s [ 2 0 0 9] E W H C 1 6 8 1 ( C h) p ar a 2 8.

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Clarifying the legal relationship

3.12 It is also important to be clear about the nature and extent of the legal relationship that exists between you and each of the other people that you deal with during the lettings process.

3.13 For example, a landlord using a lettings agent is likely to have both a contract

with the agent and a tenancy agreement with a tenant, whilst a lettings agent usually only has a contract with the landlord. Whatever the nature of your business relationship, you should always make sure you have a contractual basis for imposing charges (especially on tenants) before you ask for these to be paid.17

The Consumer Protection from Unfair Trading Regulations 200818

3.14 The CPRs came into force across the UK in May 2008. They apply to

businesses across all sectors, not just businesses involved in the letting of property.

3.15 The CPRs prohibit businesses from engaging in unfair commercial practices

in their dealings with consumers. There are a number of important concepts in the CPRs that are explained below, and contextualised in relation to the lettings sector.

Consumers

A consumer is defined as an individual who in relation to a commercial practice is acting for purposes outside his trade, craft, business or profession (referred to below as 'his business' for shorthand).19 As discussed above, it is a question of fact whether a person is acting in the course of his business.

Traders

A trader is someone who, in relation to a commercial practice, is acting for purposes relating to his business. It also includes anyone acting in the name, or on behalf of, a trader.

17 In any event, these should only include those charges that you are allowed by law to impose. 18 See OFT’s guidance Consumer Protection from Unfair Trading Regulations 2008 (OFT 1008) 19 CPRs 2(1). If the person with whom you are engaging is acting in the course of their trade, craft, business or profession, then the BPRs may apply.

16

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/284442/oft1008.pdfhttp:shorthand).19

KEY POINT - Generally speaking, the CMA considers that for the purposes of the CPRs:

• a letting agent is always acting in the course of his business in his professional dealings and needs to follow consumer law, except when dealing solely with other businesses

• tenants of residential property are normally consumers and should generally be treated as such by both letting agents and landlords

• landlords can be consumers in their dealings with letting agents, and the information they are given and the contract terms used with them should reflect the requirements of consumer law unless they are clearly acting in the course of their business.

Commercial practice

The CPRs apply to commercial practices where a trader20 is dealing with a consumer or consumers. Commercial practices refer to the activities and conduct of a business that are directly connected with the promotion, sale or supply of a product21 to or from consumers. A commercial practice may be a single act or omission, or a course of conduct over a period of time.

20 In this guidance, we use ‘trader’ to mean any type of business, including, for example, sole traders, companies or partnerships. 21 'Product' is defined very widely. It includes goods and services, including immovable property, rights and obligations. In relation to lettings, this could include for example a leasehold interest in a property or any services that an agent may wish to offer to potential tenants or consumer landlords.

17

The CPRs apply to all stages of commercial activity before, during or after a commercial transaction (whether or not a contract is concluded) in relation to a product.22 The trader need not themselves be selling, supplying or purchasing t he product. For example, an agent acting on behalf of a landlord to find a tenant fo r a property the landlord wishes to let is likely to be engaging in commercial practic es in relation to potential tenants.

Specifically in relation to lettings, commercial practices include, for example,

operating an online platform, advertising your services, offering pre-agreement advice to a client, describing a property available to let, interacting with potentia l tenants, negotiating a letting, taking a holding deposit, managing a property or handling a consumer's complaint about your conduct.

KEY POINT - The CPRs apply to the whole range of your business activities that affect consumers (see above for who might be a consumer).

The CPRs contain broad rules outlining when commercial practices are unfair. These fall into five main categories:

• giving misleading information to consumers, for example through false or deceptive advertisements or statements

• failing to give necessary information to consumers, for example leaving out or hiding important information

• acting aggressively, for example, using rent collection techniques that involv e harassment, coercion or undue influence

• failing to act in accordance with reasonable expectations of acceptable tradi ng practice (failing to be professionally diligent), where doing so impairs the consumer’s ability to make informed decisions about the product

• engaging in any of 31 specific practices that the CPRs ban outright.

For a practice to be unfair under the first four categories above, it must cause, or be likely to cause, the 'average consumer' to take a different 'transactional deci sion’.

22 CPRs 2(1). A commercial transaction is essentially where rights and obligations are created, usually by a contract. It is distinct from a transactional decision which is simply a decision in relation to a product and which need not involve the creation of any rights or obligations.

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A v e r a g e c o n s u m er

T h e C P R s ar e d e si g n e d t o pr o vi d e a l e v el of pr ot e cti o n t h at i s pr o p orti o n at e. W h at

t hi s r e q uir e s y o u t o d o i n pr a cti c e, d e p e n d s o n t h e cir c u m st a n c e s of t h e c a s e. It will

al s o d e p e n d o n w h et h er y o ur pr a cti c e s ar e t a r g et e d at a n y p arti c ul ar s ort s of

c o n s u m er, or ar e li k el y t o i m p a ct o n a n y c o n s u m er s w h o ar e v ul n e r a bl e . T h e u s u al

b e n c h m ar k i s t h e ' a v er a g e c o n s u m er': t hi s i s s o m e o n e w h o i s r e a s o n a bl y w ell

i nf or m e d a n d r e a s o n a bl y o b s er v a nt a n d cir c u m s p e ct, t a ki n g i nt o a c c o u nt s o ci al,

c ult ur al a n d li n g ui sti c f a ct or s. 2 3 It i s s o m e o n e w h o t a k e s r e a s o n a bl e c ar e of t h eir o w n

i nt er e st s. T h e ‘ a v er a g e c o n s u m er’ i s pri m aril y d efi n e d b y r ef er e n c e t o t h e w a y

or di n ar y p e o pl e b e h a v e, wit h all t h eir li mit ati o n s. It i s n ot d efi n e d b y st ati sti c al crit eri a.

I n g e n er al, i n r el ati o n t o pr o p ert y l etti n g s, t h e a v er a g e c o n s u m er m a y b e e x p e ct e d t o:

p a y s o m e att e nti o n t o d o c u m e nt ati o n, b ut n ot n e c e s s aril y t o r e a d or u n d er st a n d

t h e s m all pri nt u nl e s s k e y p oi nt s ar e br o u g ht t o t h eir att e nti o n

m a k e k n o w n t h eir o w n p arti c ul ar r e q uir e m e nt s

i n t h e c a s e of t e n a nt s, vi e w t h e pr o p ert y (if t hi s c a n b e d o n e) a n d t a k e n oti c e of

w h at t h e y c a n s e e

m a k e t h eir o w n e n q uiri e s, f or e x a m pl e c h e c ki n g o ut p u bli cl y a v ail a bl e f a ct s f o r

t h e m s el v e s w h er e t hi s i s e a s y t o d o. N ot e, h o w e v er, t h at if y o u t ell t h e a v er a g e

c o n s u m er s o m et hi n g, t h e y m a y d e ci d e t o r el y o n w h at y o u h a v e t ol d t h e m, r at h er

t h a n m a ki n g t h eir o w n or a n y f urt h er c h e c k s

a s k q u e sti o n s a b o ut s o m e of t h e t hi n g s t h e y d o n ot u n d er st a n d, b ut g e n er all y t o

tr u st w h at t h e l etti n g s pr of e s si o n al s a y s.

G e n er all y, t h er e will b e li mit s t o h o w m u c h i nf or m ati o n t h e a v er a g e c o n s u m er c a n

t a k e i n at o n e ti m e a n d t h e y will b e i nfl u e n c e d b y m ar k eti n g t e c h ni q u e s, f or e x a m pl e

t h e w a y i n w hi c h pri c e s ar e pr e s e nt e d. T h e y ar e al s o li k el y t o t e n d t o tr u st t h e

p arti c ul a r l etti n g s pr of e s si o n al wit h w h o m t h e y ar e d e ali n g.

T h e C P R s al s o pr o vi d e t h at, w h er e a c o m m er ci al pr a cti c e i s t a r g et e d at a p arti c ul ar

gr o u p of c o n s u m er s, 2 4 t h e ' a v er a g e c o n s u m er' will r ef er t o t h e a v er a g e m e m b er of

2 3 C P R s 2( 2) a n d E ur o p e a n C o urt of J u sti c e c a s e l a w. 2 4 I n di c ati o n s of w h et h er a gr o u p i s t ar g et e d mi g ht b e f o u n d i n t h e w a y t h e a d v erti si n g i s pl a c e d, t h e l a n g u a g e of

a c o m m er ci al c o m m u ni c ati o n, t h e n at ur e of t h e pr o d u ct a n d t h e c o nt e xt.

1 9

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The CPRs also provide expressly for groups of consumers who are particularly ‘vulnerable’ to a commercial practice, or a product. These are consumers who, because of age, infirmity or credulity, may be more at risk from an unfair commercial practice – for example, people who have disabilities, or the elderly.

If you foresee that you will market property or services to, or otherwise deal with, members of a vulnerable group, for example because of the nature or location of the property, then you will need to adjust your practices accordingly to address the vulnerabilities that are characteristic of that group. The average consumer will, in these circumstances, refer to the average member of the vulnerable group rather than average consumers generally. For example, if you operate in a university town, you are likely to deal with a good number of students, who may be less familiar with the process of renting a property or their legal rights, than older people with more experience of renting.

It is important to note that these protections exist, and need to be taken into account, regardless of whether or not you specifically target your practices at such vulnerable consumers. For example, it is reasonable to expect to deal with people who have disabilities, and you should therefore make sure that your practices reflect this.

that group, not the average consumer generally. This is relevant where, for example, advertising is directed at particular groups such as students, tenants claiming housing benefit, people moving from overseas, or people who speak a particular language. In such cases, the type of commercial practice you adopt and how you deal with consumers will be expected to take account of factors that are characteristic of those groups such as language barriers, limited knowledge of legal rights and/or a lack of experience.

In the CPRs and in this guidance, the average consumer therefore means one of the following (whichever is applicable): the average consumer, the average targeted consumer or the average vulnerable consumer.

KEY POINT – You should consider how your practices might affect consumers with whom you deal, and review whether you need to make any adjustments.

Think about what additional steps you may need to take where you target a particular group, and consider what vulnerable groups of people you are likely to deal with or who may see your advertising.

20

Transactional decision

Consumers need to be able to make properly informed decisions when dealing with a business carrying on a commercial practice.

The CPRs refer to the concept of a 'transactional decision' taken by a consumer. A transactional decision can include a decision to find out more about your services, or to rule out using the services of one of your competitors. It is a very broad concept, and is not limited to decisions with financial or contractual consequences – for example it would include a decision to enter a shop. A transactional decision is defined as any decision taken by a consumer, including decisions not to act, concerning:

• whether to purchase a product

• whether or not to pay in whole or part for a product

• whether or not to retain or dispose of a product

• whether or not to exercise some contractual right, and/or

• deciding how, and on what terms, to do any of these things.25

Your commercial practices, for example your market appraisal of the property to let, description of it, or the advice you give during interactions with consumers, can affect consumers' transactional decisions, for example:

• if you are an agent, a landlord’s decision to let a property through you, or to let it to a particular tenant

• a tenant’s decision to find out more about a property, view a property, apply to rent it or sign a tenancy agreement

• a tenant’s decision to pay a pre-contract deposit to you

• a landlord’s or tenant’s decision to enforce, or to refrain from enforcing, their statutory rights or rights under a tenancy agreement

• a landlord’s or tenant’s decision to pay money to you (if you are an agent), or to allow you to keep money you already hold.

25 CPRs 2(1).

21

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K E Y P OI N T – A c o n s u m er i s li k el y t o m a k e m a n y tr a n s a cti o n al d e ci si o n s i n t h e

c o ur s e of t h eir d e ali n g s wit h y o u, a n d m a n y of t h e s e will n ot h a v e fi n a n ci al or

c o ntr a ct u al c o n s e q u e n c e s.

Gi vi n g mi sl e a di n g i nf or m ati o n t o c o n s u m er s

3. 1 6 It i s a br e a c h of t h e C P R s f or b u si n e s s e s t o gi v e mi sl e a di n g i nf or m ati o n t o

c o n s u m er s, f or e x a m pl e b y m a ki n g f al s e or d e c e pti v e a d v erti s e m e nt s or

st at e m e nt s, w h er e t hi s c a u s e s or i s li k el y t o c a u s e t h e a v er a g e c o n s u m er t o

t a k e a diff er e nt tr a n s a cti o n al d e ci si o n. T hi s i s k n o w n a s a mi sl e a di n g a cti o n

(r e g ul ati o n 5).

3. 1 7 A n u nf air c o m m er ci al pr a cti c e m a y mi sl e a d c o n s u m er s:

t hr o u g h t h e f al s e i nf or m ati o n it c o nt ai n s

t hr o u g h t h e d e c epti v e n at ur e of t h e pr a cti c e it s elf, or

b e c a u s e it s o v er all pr e s e nt ati o n i s d e c e pti v e or i s li k el y t o b e d e c e pti v e

e v e n w h er e t h e i nf or m ati o n it c o nt ai n s, t a k e n lit er all y, i s f a ct u all y c orr e ct.

3. 1 8 Mi sl e a di n g i nf or m ati o n m a y b e gi v e n v er b all y, i n writi n g or v i s u all y. I n t h e

c o nt e xt of l etti n g s, e x a m pl e s of a mi sl e a di n g a cti o n c o ul d b e:

mi s -st ati n g i n a n a d v erti s e m e nt h o w m u c h it will c o st a t e n a nt t o r e nt t h e

pr o p ert y

pr o vi di n g i n a c c ur at e i nf or m ati o n a b o ut t h e pr o p ert y i n p arti c ul ar s

pr o vi di n g mi sl e a di n g i nf or m ati o n o v er t h e t el e p h o n e ( or i n t h e c o ur s e of

di s c u s si o n s) a b o ut w h e n t h e pr o p ert y i s li k el y t o b e c o m e a v ail a bl e, or

pr o vi di n g mi sl e a di n g i nf or m ati o n w h er e a t e n a nt m a k e s a s p e cifi c e n q uir y,

s u c h a s w h et h er a p arti c ul ar pi e c e of f ur nit ur e will b e pr o vi d e d i n a

f ur ni s h e d l et, a n d i n di c at e s t h at t h e i nf or m ati o n i s i m p ort a nt t o hi m.

K E Y P OI N T - Y o u s h o ul d m a k e s ur e t h at w h at y o u t ell c o n s u m er s i s n ot mi s -

l e a di n g. T hi s e xt e n d s t o pr o vi di n g i nf or m ati o n t h at i s lit er all y tr u e, b ut i s pr e s e nt e d

i n a mi sl e a di n g w a y.

2 2

Failing to give necessary information to consumers

3.19 It is a breach of the CPRs for traders to mislead consumers by failing to give them the material information they need in order to make an informed decision, where this causes or is likely to cause the average consumer to take a different transactional decision. This is known as a misleading omission (regulation 6).26

3.20 This might, for example, occur by leaving out or hiding important information,

or providing important information in an unclear, unintelligible, ambiguous, or untimely manner, where this has or is likely to have a particular effect on the average consumer.

3.21 In determining whether consumers have been misled by omission, the

circumstances and the context of the commercial practices involved would be taken into account. For example, restrictions on space (due to the media used) may mean that it is appropriate for more details to be given elsewhere, such as in the property particulars, or through the use of web links. You should consider what additional steps you may need to take if there are genuine practical difficulties in setting out what consumers need to know, so that material information is still provided.

3.22 In the context of lettings, examples of a misleading omission could involve

failing to present clearly, and upfront, fees that the tenant may have to pay, or failing to inform a tenant that a property to let does not include the use of a garden that appears to be part of the property.

3.23 The duty not to mislead by omission is limited to providing what is necessary information, described in the CPRs as 'material information'.

26 This occurs when a business omits or hides material information, or provides it in an unclear, unintelligible, ambiguous or untimely manner, and the average consumer takes, or is likely to take, a different transactional decision as a result.

23

M at e ri al i nf or m ati o n

T h e C P R s d efi n e m at eri al i nf or m ati o n a s 't h e i nf or m ati o n t h at t h e a v er a g e c o n s u m er

n e e d s, a c c or di n g t o t h e c o nt e xt, t o t a k e a n i nf or m e d tr a n s a cti o n al d e ci si o n'. 2 7

I n pr a cti c e, t hi s m e a n s e q ui p pi n g t h e a v er a g e c o n s u m er wit h all t h e i nf or m ati o n

t h e y n e e d t o m a k e a p arti c ul ar tr a n s a cti o n al d e ci si o n o n a n i nf or m e d b a si s.

C o n s u m er s n e e d t o b e pr o vi d e d wit h t h e ri g ht i nf or m ati o n at t h e ri g ht ti m e, if t h e y

ar e t o b e a bl e t o fi n d t h e pr o d u ct t h at i s ri g ht f or t h e m i n a str ai g htf or w ar d w a y.

M at eri al i nf or m ati o n d o e s n ot n e c e s s aril y i n cl u d e all of t h e i nf or m ati o n t h at a

c o n s u m er mi g ht li k e t o h a v e i n or d er t o m a k e w h at w o ul d b e t h e b e st p o s si bl e

d e ci si o n f or t h e m. R at h er, m at e ri al i nf or m ati o n i s t h e i nf or m ati o n wit h o ut w hi c h t h e

c o n s u m er c a n n ot m a k e a pr o p erl y i nf or m e d d e ci si o n. F or e x a m pl e, a t e n a nt mi g ht

li k e t o k n o w t h e l o w e st r e nt al s u m t h at a l a n dl or d w o ul d a c c e pt. H o w e v er t hi s i s n ot

m at eri al i nf or m ati o n, si n c e k n o wl e d g e of it i s n ot n e c e s s ar y f or t h e t e n a nt t o m a k e

a c o n si d er e d d e ci si o n a s t o w h et h er or n ot t o t a k e t h e pr o p ert y at t h e r e nt al

off er e d.

It i s i m p ort a nt t o c o n si d er w h at i nf or m ati o n y o u n e e d t o s h ar e a n d at w h at st a g e

t hi s n e e d s t o b e d o n e.

F or e x a m pl e, w h er e y o u ar e a n a g e nt a d v erti si n g y o ur s er vi c e s t o p ot e nti al cli e nt

l a n dl or d s, t h e m at eri al i nf or m ati o n t h at y o u s h o ul d pr o vi d e at t h e o ut s et i s li k el y t o

i n cl u d e:

a cl e ar d e s cri pti o n of t h e s er vi c e s y o u will pr o vi d e

y o ur f e e s a n d c h ar g e s, h o w t h e y will b e c al c ul at e d a n d w h e n t h e y will b e

p a y a bl e

t h e l e n gt h of t h e a gr e e m e nt a n d h o w it c a n b e t er mi n at e d.

If y o u d o n ot k n o w a pi e c e of m at eri al i nf or m ati o n, it c o ul d still b e a mi sl e a di n g

o mi s si o n if y o u d o n ot di s cl o s e it. F or e x a m pl e, w h er e y o u ar e m ar k eti n g a

pr o p ert y t o l et, y o u s h o ul d o bt ai n s uffi ci e nt i nf or m ati o n fr o m t h e o w n er i n or d er t o

a v oi d mi sl e a di n g p ot e nti al t e n a nt s b y l e a vi n g o ut m at e ri al i nf or m ati o n ( s u c h a s

a n y r e stri cti o n s o n t h e u s e of t h e pr o p ert y).

2 7 C P R s 6( 3) a. M at eri al i nf or m ati o n i s al s o a n y i nf or m ati o n r e q uir e m e nt w hi c h a p pli e s i n r el ati o n t o a c o m m er ci al

c o m m u ni c ati o n a s a r e s ult of a E ur o p e a n C o m m u nit y o bli g ati o n ( 6( 3)( b)).

2 4

http:decision'.27

Taking reasonable steps to check things out

You cannot avoid liability for misleading by omission by adopting an 'ask no questions' approach to information supplied by third parties, by failing to take reasonable steps to seek out material information where it is needed, or by turning a blind eye to any obvious problems and failing to draw them to attention of consumers.

To clarify what ‘taking reasonable steps’ to check things out might mean:

• There will be some material information that is known to you, obvious to you or easy for you to find out, for example the number of rooms in a property or its location. In these cases you may be able to identify all the material information needed from your knowledge or from the checks you undertake personally.

• In other cases there may still be gaps in the information you have, or you may need to check further (in order to give the required level of information that is reasonable for the service you are providing). If you are an agent you may find you need to ask your client landlord or third parties for further information. For example you will need to check with them that the property complies with relevant safety laws. Depending on the circumstances, you may also need to check for other things, such as whether there is available parking.

• Where you are an agent acting for a landlord and they provide you with information you know is wrong, or have reason to believe may be wrong, you should follow up with questions, ask for documented proof and/or make your own enquiries in order to satisfy yourself what is correct. For example, if their description of the number of people that could comfortably live in the property appears unrealistic, you should check further.

• Where the response from your client landlord 'rings alarm bells', you will need to probe further or challenge what you have been told. For example, where the landlord states that the gas boiler has undergone a safety check, but he is unable to supply a copy of the landlord’s certificate it would be appropriate for you to require the boiler to be checked again, and a certificate produced before finalising the letting.

The requirement not to mislead by omission applies throughout the advertising and management of the property. This means that if you become aware of material information later on, you should still disclose it. An example of this would be where you discover that the property a prospective tenant has agreed to rent will not be ready on the agreed or advertised date because, for example, works have overrun or an existing tenant has not moved out on time.

25

KEY POINT: you should:

• give material information to consumers at the right time

• not deliberately hide or leave out necessary information when dealing with consumers

• take reasonable steps to find out information, and to check things out. This includes when you discover a problem or are put on notice there might be one.

Invitation to purchase

Where a commercial practice is an ‘invitation to purchase’,28 the CPRs deem certain information to be ‘material information’,29 including:

• the main characteristics of the product

• the identity and address of the trader

• the money that has to be paid (for example, rent, administration charges etc), inclusive of taxes.

This information should be presented together, and not slowly revealed, bit by bit. The aim of the law is that consumers can make a properly informed decision, when they see the invitation to purchase, as to whether they in fact wish to proceed.

KEY POINT:

When you give information about a product and its price, this should be comprehensive. You should not select only some parts of the price, or downplay main characteristics of the product that may be less attractive.

28 The CPRs define an invitation to purchase as ‘a commercial communication which indicates characteristics of the product and the price in a way appropriate to the means of that commercial communication and thereby enables the consumer to make a purchase’. 29 This is subject to the same considerations about the context and the limitations of the communication medium as apply to misleading omissions generally (see paragraphs 3.19 – 3.23 above).

26

A cti n g a g gr e s si v el y

3. 2 4 It i s a br e a c h of t h e C P R s f or b u si n e s s e s t o u s e a n y c o m m er ci al pr a cti c e t h at,

i n t h e c o nt e xt of t h e p arti c ul ar cir c u m st a n c e s, i nti mi d at e s or e x pl oit s

c o n s u m er s s u c h a s t o r e stri ct ( or b e li k el y t o r e stri ct) t h eir a bilit y t o m a k e fr e e

or i nf or m e d c h oi c e s i n r el ati o n t o a pr o d u ct, a n d w hi c h c a u s e or ar e li k el y t o

c a u s e t h e a v er a g e c o n s u m er t o t a k e a diff er e nt tr a n s a cti o n al d e ci si o n. T h e s e

ar e k n o w n a s a g gr e s si v e pr a cti c e s (r e g ul ati o n 7).

3. 2 5 I n d et er mi ni n g w h et h er a pr a cti c e i s a g gr e s si v e, v ari o u s f a ct or s, s et o ut i n t h e

C P R s, m a y b e t a k e n i nt o a c c o u nt, f or e x a m pl e:

w h e n, w h er e, h o w a n d h o w p er si st e ntl y t h e b u si n e s s i s c arr yi n g o ut t h e

pr a cti c e

w h et h er t h e b u si n e s s i s e x pl oiti n g a s p e cifi c mi sf ort u n e or cir c u m st a n c e

of a c o n s u m er, w hi c h i s li k el y t o i m p air t h eir j u d g e m e nt

w h et h er t h e b u si n e s s i s e x pl oiti n g a p o siti o n of p o w er i n r el ati o n t o t h e

c o n s u m er, i n or d er t o e x ert pr e s s ur e o n t h e m, i n a w a y t h at si g nifi c a ntl y

i m p air s t h e c o n s u m er' s a bilit y t o t a k e a n i nf or m e d d e ci si o n

w h et h er t h e b u si n e s s h a s pl a c e d e x c e s si v e b arri er s o n t h e c o n s u m er

e x er ci si n g t h eir ri g ht s

w h et h er t h e b u si n e s s h a s u s e d t hr e at e ni n g l a n g u a g e or t hr e at e n e d t o

t a k e l e g al a cti o n a g ai n st a c o n s u m er t h at c a n n ot l e g all y b e t a k e n.

3. 2 6 I n t h e c o nt e xt of l etti n g s, e x a m pl e s of a n a g gr e s si v e pr a cti c e mi g ht i n cl u d e,

f or e x a m pl e:

• E nt eri n g a t e n a nt’ s pr o p ert y wit h o ut t h eir p er mi s si o n i n or d er t o di s c u s s

l at e p a y m e nt of r e nt.

• E x pl oiti n g a p o siti o n of p o w er t o m a k e it h ar d f or s o m e o n e t o p ull o ut of

t h e pr o c e s s of a gr e ei n g a t e n a n c y a gr e e m e nt w h e n t h e y ar e n ot s ur e

t h e y w a nt t o pr o c e e d – f or e x a m pl e b y r ef u si n g t o r et ur n a h ol di n g d e p o sit

wit h o ut g o o d r e a s o n.

T hr e at e ni n g t h e t e n a nt wit h e vi cti o n t o di s s u a d e t h e m fr o m e x er ci si n g

ri g ht s t h e y h a v e u n d er t h e t e n a n c y a gr e e m e nt or i n l a w, f or e x a m pl e

w h er e t h e y wi s h t o m a k e a c o m pl ai nt t o a l o c al a ut h orit y a b o ut t h e

c o n diti o n of t h e pr o p ert y, or s e e k d a m a g e s f or di sr e p air.

2 7

• Telling the tenant you are ending the assured shorthold tenancy through the ’no fault’ procedure under Section 21 of the Housing Act 1988 to make the tenant leave voluntarily, when the tenant’s deposit has not been properly protected. If the deposit has not been protected, the landlord cannot legally use the no fault procedure to end the tenancy.30

KEY POINT: Think about the impact of your business practices on consumers. A practice could be considered aggressive because of the impact it is likely to have on a consumer, and how much pressure it places on him or her.

Professional diligence and the general prohibition against unfair commercial practices

3.27 The CPRs place a general prohibition on unfair commercial practices (regulation 3). These include practices where a business fails to act in a professionally diligent way (meaning fails to act in accordance with honest market practice or in good faith) in its dealings with consumers. To be unfair, the practices concerned must materially distort or be likely to materially distort the economic behaviour of the average consumer. This means that it would impair the ability of the average consumer to take an informed decision, causing them, or leaving them likely, to take a transactional decision they would not otherwise have taken.

3.28 The standards referred to of honest market practice and good faith are

objective ones. This means that they are not determined by how other lettings professionals are acting. If for example, lettings professionals in your area routinely adopt a poor practice, this does not mean the benchmark for what counts as an acceptable practice will be lowered. If you fail to meet the standard considered necessary to be professionally diligent, you would breach the law even if the practice you adopt is widespread in the industry.

3.29 In the context of lettings, you are likely to be failing to act in a professionally

diligent manner if, for example, you do not comply with recognised standards

30 Section 21 of the Housing Act 1988 applies in England and Wales. It allows a landlord to ask the tenant to leave at the end of the minimum assured shorthold period. As long as the landlord complies with the procedure set out by Section 21, they do not have to give any reason for ending the tenancy (for example that the tenant is in rent arrears). See chapter 9 for more information and pages 84-85 in particular.

28

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in your industry or profession, such as those set by guidance, codes of practice or similar.31

KEY POINT: Be aware of industry standards as these are likely to be treated as a minimum standard of professional diligence that your business is expected to meet. If you are a member of a code of conduct and tell people that you are a member you must observe its requirements.

Banned practices

3.30 There are a number of specified practices listed in Schedule 1 to the CPRs that are considered unfair in all circumstances and which are always prohibited outright. We have listed some of these below, which may be particularly relevant for lettings professionals, and explained how, and in what situations, they may apply.32 Examples of possible banned practices in the context of lettings are also given in chapters 4 to 9.

Membership of codes of practice and claims about your business

• ‘Claiming to be a signatory to a code of conduct when you are not.’ (1)

• ‘Displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation.’ (2)

• ‘Claiming that you (including your commercial practices) or a product have been approved, endorsed or authorised by a public or private body when you, the commercial practice or the product have not, or making such a claim without complying with the terms of the approval, endorsement or authorisation.’ (4) For example if you are a member of a lettings redress scheme, you should comply with all of its code.

Advertisements and sales techniques

• ‘Making an invitation to purchase products at a specified price without disclosing the existence of any reasonable grounds you may have for believing that you will not be able to offer for supply or to procure another

31 The TPO Code of Practice for Letting Agents, the RICS Blue Book (UK Residential Standards 5th Edition) or RICS’ Private rented sector code (still to be published at time of producing this guidance) for example. 32 The numbers shown in brackets indicate the paragraph of the relevant specified practice in Schedule 1.

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trader to supply, those products or equivalent products at that price for a period that is, and in quantities that are, reasonable having regard to the product, the scale of advertising of the product and the price offered (bait advertising).’ (5) For example, it would be illegal to advertise that you have many properties available to rent for a low rent, if you only actually have a few of them.

• ‘Making an invitation to purchase products at a specified price and then refusing to show the advertised item to consumers with the intention of promoting a different product’ (sometimes known as bait and switch).’ (6) This could include keeping a desirable property listed on an online portal, in order to attract customers, but not accepting requests to view the property and suggesting alternative properties instead.

• ‘Falsely stating that a product will only be available for a very limited time, or that it will only be available on particular terms for a very limited time, in order to elicit an immediate decision and deprive consumers of sufficient opportunity or time to make an informed choice.’ (7) This may be relevant if you tell potential tenants that a particular property is about to be rented by someone else and therefore they need to decide immediately if they want to rent it (and, for example, pay a deposit to hold it or sign a tenancy agreement straight away), if this is not the case.

• ‘Stating or otherwise creating the impression that a product can legally be sold when it cannot.’ (9) For example, advertising a property that is not available to rent.

• ‘Presenting rights given to consumers in law as a distinctive feature of the offer.’ (10) For example it would be wrong to suggest that your service involves taking additional care of tenants’ deposits, if you simply put them into a tenancy deposit scheme, as you are required to by law.

• ‘Passing on materially inaccurate information on market conditions or on the possibility of finding the product with the intention of inducing the consumer to acquire the product at conditions less favourable than normal market conditions.’ (18) This is relevant if you suggest to tenants an inaccurate going rent for properties in order to persuade them to agree to pay the rent you are asking.

Claims about whether you are in business or not

• ‘Falsely claiming or creating the impression that you are not acting for purposes relating to your trade, business, craft or profession, or falsely

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r e pr e s e nti n g y o ur s elf a s a c o n s u m er’. ( 2 2) A s m e nti o n e d a b o v e, l a n dl or d s

s h o ul d n ot p ur p ort t o b e c o n s u m er s if t h e y ar e i n f a ct a cti n g i n t h e c o ur s e of

a b u si n e s s.

C o nt a ct wit h t h e c o n s u m e r, i n cl u di n g d e ali n g wit h pr o bl e m s a n d m a ki n g

p e r s o n al vi sit s

• ‘ C o n d u cti n g p er s o n al vi sit s t o t h e c o n s u m er’ s h o m e i g n ori n g t h e

c o n s u m er’ s r e q u e st t o l e a v e or n ot t o r et ur n, e x c e pt i n cir c u m st a n c e s a n d

t o t h e e xt e nt j u stifi e d, u n d er t h e l a w, t o e nf or c e a c o ntr a ct u al o bli g ati o n.’

( 2 5) T hi s i s a r el e v a nt c o n si d er ati o n if y o ur pr a cti c e s m e a n y o u e nt er t h e

t e n a nt’ s pr o p ert y a n d m a y b e e s p e ci all y r el e v a nt if y o u vi sit t o c oll e ct r e nt.

• ‘ M a ki n g p er si st e nt a n d u n w a nt e d s oli cit ati o n s b y t el e p h o n e, f a x, e-m ail or

ot h er r e m ot e m e di a e x c e pt i n cir c u m st a n c e s a n d t o t h e e xt e nt j u stifi e d

u n d er t h e l a w t o e nf or c e a c o ntr a ct u al o bli g ati o n.’ ( 2 6) T hi s i s i m p ort a nt t o

b e ar i n mi n d if y o u m ar k et y o ur s er vi c e s t o p ot e nti al cli e nt s or t e n a nt s b y

e m ail or t el e p h o n e: y o u s h o ul d m a k e s ur e t h at y o u r e m o v e p e o pl e fr o m

y o ur m ar k eti n g d at a b a s e w h o r e q u e st n ot t o b e c o nt a ct e d.

B u si n e s s P r ot e cti o n fr o m Mi sl e a di n g M ar k eti n g R e g ul ati o n s 2 0 0 8 3 3

3. 3 1 It i s a br e a c h of t h e B P R s t o m a k e r e pr e s e nt ati o n s, a d v erti s e or m ar k et t o

ot h er b u si n e s s e s i n a w a y t h at d e c ei v e s ( or i s li k el y t o d e c ei v e) t h e m, if t hi s i s

li k el y t o aff e ct t h eir e c o n o mi c b e h a vi o ur or i nj ur e s or i s li k el y t o i nj ur e a

c o m p etit or (r e g ul ati o n 3). T h e d e c e pti o n m a y d eri v e fr o m f al s e i nf or m ati o n, or

fr o m t h e w a y t h e i nf or m ati o n i s pr e s e nt e d, i n cl u di n g it s o mi s si o n.

3. 3 2 T h e B P R s will a p pl y w h e n y o u a d v erti s e y o ur s er vi c e s t o p ot e nti al n e w cli e nt s

t h at ar e b u si n e s s e s, w h e n y o u m ar k et pr o p ert y t o l e t t o b u si n e s s e s, a n d w h e n

y o u m a k e a n y st at e m e nt t o a n ot h er tr a d er i n or d er t o pr o m ot e eit h er y o ur o w n

b u si n e s s or t h e l etti n g of y o ur cli e nt' s pr o p ert y.

3. 3 3 A r e pr e s e nt ati o n, st at e m e nt or a d v erti s e m e nt c a n b e mi sl e a di n g u n d er t h e

B P R s if it:

c o nt ai n s a f al s e st at e m e nt of f a ct

c o n c e al s or l e a v e s o ut i m p ort a nt f a ct s

3 3 S e e t h e O F T' s q ui c k g ui d e t o t h e B P R s, B u si n e s s t o b u si n e s s pr o m oti o n s a n d c o m p ar ati v e a d v erti s e m e nt s

( O F T 1 0 5 6) for m or e i nf or m ati o n.

3 1

http://www.nfopp-regulation.co.uk/media/539474/bprs.pdfhttp://www.nfopp-regulation.co.uk/media/539474/bprs.pdf

pr o mi s e s t o d o s o m et hi n g w h e n t h er e i s n o i nt e nti o n of c arr yi n g it o ut

cr e at e s a f al s e i m pr e s si o n ( e v e n w h er e t h e i nf or m ati o n it s el f i s lit er all y

tr u e).

3. 3 4 T h e B P R s will a p pl y, f or e x a m pl e, t o a n a g e nt i n t h eir d e ali n g s wit h a l a n dl or d

w h o i s n ot a c o n s u m er. T h e f oll o wi n g ar e ill u str ati v e e x a m pl e s of mi sl e a di n g

b u si n e s s t o b u si n e s s a d v erti si n g. It i s n ot a n e x h a u sti v e li st. I n e a c h c a s e , t h e

t e st i s w h et h er t h e tr a d er w h o i s a d dr e s s e d or r e a c h e d b y t h e a d v erti si n g i s

mi sl e d or li k el y t o b e mi sl e d a n d, a s a r e s ult, alt er s t h eir e c o n o mi c b e h a vi o ur,

or a c o m p etit or i s h ar m e d or li k el y t o b e h ar m e d. E x a m pl e s i n cl u d e:

Mi sl e a di n g a u ni v er sit y a c c o m m o d ati o n s er vi c e a b o ut t h e q u alit y of

pr o p erti e s y o u h a v e a v ail a bl e f or st u d e nt s t o r e nt.

Pr o vi di n g mi sl e a di n g i nf or m ati o n a b o ut t h e l e v el of r e nt t h at y o u will b e

a bl e t o o bt ai n f or a pr o p ert y, or t h e n u m b er of t e n a nt s y o u h a v e w aiti n g f or

pr o p erti e s, i n or d er t o o bt ai n b u si n e s s f r o m a pr of e s si o n al l a n dl or d.

M a ki n g u nf air c o m p ari s o n s wit h c o m p etit or s

3. 3 5 It i s a br e a c h of t h e B P R s t o m a k e c o m p ari s o n s wit h c o m p etit or s i n y o ur

a d v erti si n g u nl e s s y o u m e et t h e c o n diti o n s t h at p er mit s u c h a d v erti si n g

( c o m p ar ati v e a d v erti si n g – r e g ul ati o n 4).

3. 3 6 T h e c o n diti o n s r el at e m ai nl y t o e n s uri n g t h at t h e a d v erti si n g:

i s n ot mi sl e a di n g, w h et h er u n d er r e g ul ati o n 3 of t h e B P R s or u n d er

r e g ulati o n s 5 ( mi sl e a di n g a cti o n s) or 6 ( mi sl e a di n g o mi s si o n s) of t h e C P R s

o bj e cti v el y c o m p ar e s li k e -f or-li k e, a n d r el e v a nt, r e pr e s e nt ati v e a n d

v erifi a bl e f e at ur e s

d o e s n ot cr e at e c o nf u si o n b et w e e n t h e a d v erti s er a n d a c o m p etit or

d o e s n ot d e ni gr at e or di s cr e dit t h e tr a d e m ar k s, tr a d e n a m e s or ot h er

di sti n g ui s hi n g a c